Ireland’s Ryanair and Boeing have announced an order for 75 additional 737-8-200 aircraft for Ryanair, Boeing’s largest European customer for the aircraft. The deal comes in the wake of the FAA approval for re-entry of the aircraft into service in the US but before the aircraft has been formally cleared to operate in Europe. The EASA re-approval and proposed airworthiness directive is currently in a public comment period and European re-certification is expected in January 2021.
The industry rumor mill indicates that the deal has been priced essentially as “three for the price of two” from the currently discounted prices, making this transaction a very sweet deal for Ryanair and an essential new order win for Boeing. While Boeing will end the year with a massive reduction in backlog for the MAX in the wake of the grounding and pandemic, this order provides both a boost in confidence in the airplane from a customer and, albeit at low margins, an expansion rather than contraction of the order book.
With deliveries scheduled from 2021-2024, Ryanair could potentially take up some of the already built aircraft that were scheduled for other customers prior to order cancellations, enabling Boeing to capitalize on that portion of the 450 or so aircraft it has built but not yet delivered to customers. The company will begin to slowly ramp-up new production of the MAX, but because Boeing has not yet regained its production certificate, every new MAX will need to be individually inspected and approved by the FAA, a time consuming and costly process.
Dave Calhoun, President and CEO of Boeing, stated “Boeing remains focused on safely returning the full 737 fleet to service and on delivering the backlog of airplanes to Ryanair and our other customers in the new year. We firmly believe in this airplane and we will continue the work to re-earn the trust of all of our customers.” While Boeing in its press information called the airplane the 737-8-200 rather than utilize the term MAX, Calhoun denied that there is any name change going on with the product. But in recent orders, Boeing has avoided the word MAX in the sales announcements, indicating a de-emphasis of the MAX name on a customer by customer basis.
Ryanair is the major customer for a specific configuration of the MAX, the 737-8-200. That configuration includes an additional over-wing exit to enable the aircraft to carry 197 for Ryanair passengers in a single-class all-economy configuration.
Michel O’Leary, who heads Ryanair, stated “This is the most scrutinsed, most audited aircraft in history. It’s also going to be one of the safest aircraft that’s ever been delivered”
“The board and people of Ryanair are confident that our customers will love these new aircraft. They will enjoy the new interiors, the more generous leg room, the lower fuel consumption and the quieter noise performance, but most of all, they will love the lower fares, which these aircraft will enable Ryanair to offer not just in 2021, but for the next decade, as Ryanair leads a strong recovery of Europe’s aviation and tourism industry out of the 2020 Covid-19 crisis.”
In addition, “We are working closely with Boeing and our senior pilot professionals to assist EASA to certify these aircraft in Europe, and to complete the training of our pilots and crews across our three new Boeing MAX simulators in Dublin and Stansted.”